Lew Signals Yuan Not Ready for IMF Blessing as Reserve Currency

U.S. Treasury Secretary Jacob J. Lew said China needs to loosen its financial controls before the yuan can qualify to be included in the IMF’s basket of reserve currencies.

Lew urged China to ease restrictions on the flow of capital and the setting of interest rates to ensure the yuan is increasingly used as an international currency. China must implement the “necessary reforms” before it will meet the International Monetary Fund’s standards for inclusion in the basket of currencies that determine the fund’s Special Drawing Rights, Lew said in a speech Tuesday in San Francisco.